IN the greater scheme of things, the authorities' inability to control the pirate trade in pop compact discs (CDs) might seem a piffling matter. After all, the bootlegging concerns mostly Canto-pop recordings, so it is unlikely to cause much anxiety to the international music labels. But the Hong Kong Government should beware. The pirating, as we report today, is being done in southern China - and any illicit business of this nature taking place on the mainland is likely to catch the attention of those official bodies in the United States that monitor China's activities in relation to its Most Favoured Nation (MFN) trading status. Probably not one member of those bodies is terribly concerned about how much the Hong Kong music industry may be losing to the thieves across the border, but they are on the look-out for evidence that, in the end, will be put to the Washington decision-makers. We report that a million pirated CDs were smuggled into Hong Kong in the first half of this year. That is a lot of evidence. It is in Hong Kong's interests that China's MFN status be renewed. It has been proved that lobbying helps. Helping to close down the copyright thieves would go a long way towards showing Hong Kong's good will, should it become an issue for MFN. More importantly though, failure to stamp out the music pirates can only serve to harm Hong Kong in the long run. Just as the territory is ridding itself of its image as a paradise for fake goods, allowing pirates to prey on the music industry will only reinforce such a negative image.